Full text of H.16 Capital Market Developments : February 27, 1961
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Not for I^blicationDEC01ITE0LLKn AFTER SIX MONTHS
H.lii
1 1951
^
A
.: !
I
'
February. 27, 1961.
«—nAPTT^y.
DEVELOPMENTS
IN THE UNITED STATES AND CANADA
Part I - United States
(Including Review of Sources and Uses of.Funds
of Financial Intermediaries in i960)
The volume of new public security financing was very small last
week, but is expected to be somewhat larger this week, particularly for
State and local governments. During the week ending February 2k only
one large local government issue for $19 million was sold. No large
corporate issues were offered for sale last week and none are scheduled
for this week. State and local government bond issues are expected to
total <$182 million, including a $100 million New York State Power Authority issue which is expected to be sold at mid-week by negotiation.
Long-term bond yields - Yields declined last week for all
categories of outstanding bonds, except those for lower grade State and
local government bonds. The decline for U. S. Government bonds was 5
basis points, while that for other high-grade bonds was 2 basis points.
Only Baa-rated State and local government bond yields remain above the
lows reached earlier this year.
Short- and intermediate-term interest rates - Rates on Treasury
bills—both 3-month and 6-month—continued to increase last week, reaching new highs for the year. Yields on intermediate-term Government issues
declined. Several finance companies lowered their rates on directly placed
finance company paper last week, but not enough to affect the yield series.
Other short-term money rates were unchanged.
Mortgage recordings - Nonfara mortgage recordings declined
further in December, and for the month were 6 per cent lower than a year
earlier. Conventional loans were about the same as in December 1959
while Federally underwritten loans were 23 per cent lower. In the year
i960, mortgage recordings totaled $29.3 billion, or 9 per cent less than
the $32.2 billion in 1959 j Federally underwritten loans amounted to $6.6
billion in 1960 compared with $8.9 billion the year before.
Stock prices - Stock prices advanced to new highs last week
in record trading activity. Standard and Poor's index of 500 common
stocks closed at 62.8b on February 2kt one per cent higher than the peak
reached earlier this month. Trading volume averaged 5.2 million shares
a day.
Institutional investors - In December, share capital at savings
and loan associations and deposits at mutual savings banks continued to
increase more rapidly than a year earlier, while the increase in assets
at life insurance companies was mailer. The growth at savings and loan
-2-
Sources and Uses of Funds of Major Types of Savings Institutions 1/
1953-1960
(in millions of dollars)
U. S.
Govt,
securities
Uses of funds
State &
Busilocal
Mortness
govt.
secur gages
ities
Other
Sources of funds'
Total Net change
Borrow- Other
in
deposits
sources
ing
or savings
or
capital
Life Insurance Companies
-l*ol*
5
-331*
-36
151*
69
-526
1I4
18 -1,026
-1*76
55
-7I46
5
-U28
80
1,919
2,365
2,1*79
2,1*95
1,972
2,126
2,280
2,792
2,199
2,207
1,821
2,2^
3,#9
3,197
2,653
2,030
I4I45
I486
3114
12I4
236
165
555
152
1,627
1,358
1,1*31*
950
808
832
1,120
51*1
6,091
6,0146
6,271
5,#8
5,577
6,199
5,867
5,167
Savings and Loan Associations
I46I4
-U02
U39
2.7
52
92
1*92
190
83
658
6I46
391
1*1*0
325
93
133
——
—
—
e,m
7,567
5,578
14,278
1*,268
5,300
l*,ll*6
3,566
1*76
568
n.a.
n.a.
n.a.
338
571
1*08
320
172
189
7,871
8,391
7,001
5,263
5,156
6,023
14,900
14,073
7,533
6,607
6,061*
1*,?61*
k,956
14,890
14,1406
3,651
-228
9143
65
32
-211
71*5
-77
83
566
81*1
872
1*67
1*11
388
571
339
Mutual Savings Banks
1*3
-70
31
-30
-1*5
-61
1*3
65
-63I4
-3I4O
-286
-1*19
-1*89
-288
-1*36
-238
225
-81
612
808
177
-178
230
388
1,945
1,868
2,088
1,1*22
2,28k
2,1*29
2,050
1,556
-1*6
-2
1*3
13
32
37
193
82
91
107
914
63
78
57
68
I4I4
r7 Revised.
n.a.—Not available.
,
\J For description of data see exhibits J, K and L.
1,6214
1,1483
2,611
1,857
2,037
1,998
2,1146
1,897
1,362
l,23U
1,81(5
1,828
1,961
1,777
262
2149
265
19l4
192
170
185
120
-3associations and mutual savings banks was one-tenth larger than in
December 1959, while that of life insurance companies was one-tenth
smaller.
For the year i960 the total inflow to these three major types
of savings institutions was 5 per cent greater than in 1959 and 2 per
cent more than in 1958. (In i960 time and savings deposits at commercial
banks increased more than twice as much as they had in the previous year.)
The increase in life insurance company assets amounted to $ 6 . 1
billion in i960, about the same as in 1959. Net acquisitions of mortgages,
totaling $ 2 . 5 billion, were one-eighth larger than a year earlier. These
companies built up their mortgage portfolios rapidly throughout the first
half of last year, but after June the increase in these holdings was
smaller than in the corresponding months of 1959. Net purchases of business securities were smaller in most months last year than in 1959 with
the total for the year being nearly one-fifth smaller. Net liquidation
of U. S. Government securities was somewhat larger than .in -the previous
year.
The inflow to savings and loan associations continued to advance
at a record pace during i960. Savings capital increased $7.5 billion in
i960, one-seventh larger than in 1959. Much of this increased inflow
was used to repay borrowings, principally from Federal home Loan Banks,
and to build up their cash balances. (In 1959 the associations had borrowed
in record amounts and drawn down their cash substantially to supplement
their savings inflow in order to make mortgage loans.) The net increase
in mortgage holdings totaled $ 6 . 8 billion, one-tenth below that of 1959.
Net acquisitions of U. S. Government securities were very small in contrast
to the substantial acquisitions in 1959 and other recent years.
The growth of deposits at mutual savings banks, totaling $1.1*
billion, was one-tenth larger than in 1959, but smaller than in any other
year since 1951. Most of the deposit rise occurred in the second half
of the year. The net increase in mortgage holdings was $L.9 billion last
year, slightly larger than a year earlier, holdings of business securities
increased more than $200 million in contrast with a slight decline in 1959.
Net liquidation of U. S. Government securities at $63li million, was nearly
twice as large as a year earlier.
More detailed information concerning recent capital market
developments is presented in the attached exhibits.
Developments in the Canadian capital markets are presented in
Part II at the end of this report.
Capital Markets Section,
Division of Research and Statistics,
Board of Governors of the Federal Reserve System.
LONG-TERM
BOND
YIELDS
HIGH-GRADE
1^.
LOWER-GRADE
j
M U.S.
GOVERNMENT
Exhibit B - Tables for Exhibit A
Long-term Bond Yields
High-grade
Corporate
Aaa 1/
Date
U. S. Govt.
long-term 2/
State and
local
government
Aaa 3/
Spread between
U. S. Govt, and
Corporate State and
Aaa
local Aaa
(per cent)
195*4 - Low
1957 - High
1958 - Low
1959-60 - High
1961 - High
Low
Jan.
Feb.
Feb.
Feb.
Feb.
27
3
10
17
2h 2/
1.90 (9/2)
3.76
3.07
k.h2
3A5
h.3k (1/6)
lt.25 ( 2/2JU)
3.92'(1/20)
3.76 (2/2U)'
3.16 (2/2)
3.12 (2/23)
ii.31
W o
it. 28
L27 ^
L25<^
3.89
3.88
3.8U
3.81
3.76
3.16
3.16
3.1i*
3.U4
3.12
.h2
.U2
.kk
.1*6
.19
(4/23)
(9/27)
3.55 (5/2)
14.61
,
2.15 (8/6)
.30
.60
.22
.59
.50
.UO
2.85
U-UU
(1/29/60)
(10/18)
(4/25)
(1/P/60)
2.6U
3.65
(e/29)
(5/1)
(9/24/59)
• 30
.50
• 3U
.92
• .76
,6k
.73
.72
.70
.67
.6J4
Lower grade
Date
19514 - Low
1957 - High
1958 - Low
1959-60 - High
1961 - High
Low
Jan.
Feb.
Feb.
Feb.
Feb.
27
3
10
17
2b p/
Corporate
Baa 1/
3.14*4 (12/31)
5 . 1 0 (11/29)
It. 5 1 (7/11)
5.36 (2/12/eo)
State and
local
government
Baa 3/
(per cent)
2.93 (8/5)
14.51 (8/29)
(5/1)
5.12 (1/27)
5.06 (2/2I4)
3.614
L.I46
L09
I4.03
5.12"
5.10
5.07
5.07
/
5.06 ^
14.09
14.09
14.05
14.05
14.05
(1/7/60)
(2/2)
(1/5)
Spread between
Aaa and Baa
State and
Corporate
local govt.
.52
1.27
.77
.81*
.81
.714
.96
1.21
.93
/ 1.08
•93
.90
.81
.80
.79
.80
.81
.93
.93
.91
.91
.93
j/ Preliminary.
1/ Weekly average of dally figures. Average term of bonds Included 1* 25-26 years.
2/ Weekly average of daily figures. The series Inoludee bonds Tdue or callable In 10 years or more,
3/ Thursday figures. Only general obligation bonds are included; average term is 20 yeers.
Note.—Highs and Iowa are for individual series and may be on different dates for different series
SHORT-
AND
3 • S
YEAt
INTERMEDIATE-
TERM
INTEREST
RATES
ISSUES
PRIVATE
STOCK EXCHANGE
CAU I 0 A N S
,
Going Sole - — |
FINANCE COMPANY PAPER
Direelly Plated
Exhibit D - Tables for Exhibit C
Short- and Interaediate-tenn Interest Bates
Government
Date
Discount
rate
1/
195U - Low
1957. - High
: 1958 - Low
1959-60 - High
| 1961 - High.
f:
Low
1.50
3.50
1.75
U.00
n.a.
n.a.
| Jan. 27
1 Feb. 3
%Feb. 10
| Feb. 17
| Feb. 2b g /
3.00
3.00
3.00
3.00
3.00
!
Date
1951* - Low
1957 - High
;1958 - Low
1 9 5 9 - 6 0 - High
1961 - High
Low
Jan.
Feb.
Feb.
Feb.
Feb.
27
3
10
17
2It 2/
/
X-month
bills 2/
.61
Yields
6-month
bills 2/
(per cent)
3-5 year
issues 2/
1.66
(6/11)
3.6U (lo/ie)
•58 (s/2q)
Spread between yields on
3-month bills and yields on
O-mo, bills|3-5 y r . issues"
(4/30)
Loll (10/18)
2.1U (6/6)
2 . 5 1 <2/210 2 . 6 8 ( 2 / 2 U )
2 . 1 7 ( 1 / 2 7 ) 2.1*2 ( 1 / 2 7 )
3.59 ( 1 / 2 0 )
3.39 (1/6)
.26
.79
.25
.17
2.17
2.29
2.35
2.U0/
2.51/
3.57
3.57
3.56
3.56
3.U8
.25
.20
.20
.19
.17
^•59
(1/8/60)
3 . 0 2 (12/26)
5 . 0 7 (1/8/60)
2.1*2
2.h9
2.55
2.59
2.68
5.00
(12/24/59)
.66
.86
.Oli
1.81
l.ljO
.97
1.1*0
1.28
1.21
1.16
.97
Spread between 3-month
Finance company Treasury bill yield and
Primo
finance company
rate 1 /
paper 3 /
paper rates
(per cent)
Stock Exchange
call loan 1 /
3.00
U.50
3.50
5.50
n.a.
n.a.
3.00
li.50
3.50
5.00
n.a.
n.a.
U.50
li.50
U.50
U.50
It. 50
U.50
U.50
U.50
U.50
U.50
x
1.25 dV3i)
3 . 8 8 (11/15)
. 1 . 1 3 (0/8)
5.13 (V'/co)
2.83(1/6)
2.63 (2/17)
2.71
2.6U
2.63
2.63
2.63
V
0
.63
-.35
1.02
.56
.12
(v/Vo)
(11/2 4
(»/2v)
(3/2',/fcO)
(1/20)
(2/2U)
• 5U
.U2
.28
.23
.12
1/ Vuokly rate shown la that In effect at end of period. Dlacount rate la for Federal Reserve Bank of Hew York.
Stock Rtoluirye call loan re.te la going rate on call loans secured by ouatoaiore1 ctock exchange collateral at
How York City banks, Prints rate Is tlut charged by large banks on ahort-torm ioanu to buelntea borrowers of
thu hlfihtat credit standing,
2/ Kirkot yield) weekly averages computed from dally closing bid prices. Series of 3-5 year lsauto consists of
ocleottd notes and bonds.
3/ Average of dally rates published by finance companies for directly placed paper for varying isaturltlea In the
90-179 day range.
Note,~Hl>;ha and lows are for Individual series and may be on different dates for different series. For sproc.de,
high refers to widest, and low to narrowest.
t
STOCK
MARKET
t n
MORTGAGE
RECORDINGS
AND
LOANS
Exhibit r - Tables for Exhibit E
Stock Market
Common
stock
yields 2/
(per cent)
Trading
volume 3/
(millions
of shares)
62.81 (2/2lt)
58.1*6 (1/6)
3.08
k.72
3.10.
3.32
h.9
l.ii
5.2
3.6
!|,761l (4/59) 3,1401 (4/S9) 1,373
3,551* (1/58) 2,182 (12/57) 1,060
n.a.
1,172
n.a.
n.a.
1,159
56.80
59.72
61.50
62.10
62.81;
3.a
3.28
3.17
3.13
3.10
3.7
1*,1*06
1*,1*16
n.a.
n.a.
n.a.
Date
Stock pricc
index 1/
1957-60 - High
Low
1961 - High
Low
December
January
Feb. 10
Feb. 17
Feb. 2k g/
6 0 . 5 1 (7/31/59)
3 9 . 1 8 (12/20/57)
li.2
•
h.7
4.6
5.2
Stock market customer credit
Customers1
Bank
debit balloans to
ances h/
"others" 5/
(In millions of dollars)
Total
3,222
3,253
n.a.
n.a.
(W)
(11/57)
(1/6)
(2/17)
i,m
1,163
1,159
1,167
n.a.
^
n.a.wKot available.
o/ Pmllelfcary.
1/ Standard and Poor's ccnpoelto indsx nf 500 ccr^on stocks, wseltly oloolrj price?, 1941-43=10. Monthly data are
averages of dally flguroo rathor than of Mtlcy'e only. Higlu* and Ions are for Fridayc' data only.
2/ Standard and Poor'o bcmpotilta otook yield baood on Wednesday data converted to weekly closing prices by Kovterol
Rtccrve. Yioldo ohovn arc for daten on which prioa Index reached lt.i high or low.
3/ Av >r eyes' of dally trading volv.-je on tlu New York Stock Exchange.
4/ End of month flcures for member firr-.o of thj tbw York Stock Exchange which carry margin accounts; excludeu balances
sacured by U, S. Govtrnncci. obll^ctlons.
5/ Mailncsdiy figure o for Weekly reporting member banka. Excludes loans for purchasing or carrying U. S. Govemneiit
focurlties. Prior to July 1, 1959, such loznm are excluded only at banka in Kc»; York and Chicago. lfenkly repdrtlr^
Noqfarm Mortgage Recordings and Loans 1/
Date
1959 - Dec.
1960 - Jan.
Feb.
Mar.
Apr.
May
July
Aug.
Sept.
Oct.
Nov.
Dec.
Total
Seasonally
Unadjusted
adjusted 2/
2,1*85
as
2 , a s ?
2,ll00
2,Wl6
2,1(27
2.IS3
2,488
2>61t
2,451
2,1)26
n.a.
2,1*87
2,079
2,1#
2,1*06
2,366
2,500
2,690
2,528
2,78k
2,598
2,525
2,378
2,338
Unadjusted
FHA
U51
1*17
368
361 •
336
322
365
362
1*17
1*25
1*31*
1*01*
390
-VA
21*1
195
170
173
153
155
175
160
181
169
162
15b
11*2
Conv.
1,791*
1,1*67
1,612
. 1,872
1,878
2,023
2,150
. 2,006
2,186
2,001*
1,929
- 1,821*
1,806
n.a.—Hot available.
1/ Total rocordings data are estimates based on reports from about 450 areas and include
mortgages of (20,000 or leas secured by nonfarra real estate, primarily residential properties.
PHA-insured loans represent gross amount of insurance written, and VA-guaranteed loans the gross amount
of loans closed,on 1-4 family houses. Conventional data are derived as a residual, although total
recordings and VA and FHA loans ore not strictly comparable in concept or timing.
2/ Three-month moving average, seasonally adjusted by Federal Reserve.
Source1 Federal Home Loan Hank Board, Federal Housing Administration and Veterans Administration.
Exhibit G
Long-term Corporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)
1961
Januaiy
February
March
— ^e/$00
e/650
New capital
State and local 2/
Corporate 1/ .
1961
| I960
1 I960
1 1959
1 1959
577
715
860
821
738
6U6
April
May
766
567
1,03k
m
785
887
731
550
1,033
July
August
September
727
962
' 738
535
740
703
572
602
689
October
November
December
874
959
876
879
864
900
339
502
b/48I
§§
2/151
2,367
2,127
2,709
2,204
2,567
1,979
2,642
1,943
2,316
1,863
E/1,322
2,143
2,531
1,548
1,571
4,519
6,945
9,655
4,771
6,750
9,392
4,259
6,122
2/7,444
4,674
6,222
7,793
1st
2nd
3rd
4th
quarter
quarter
quarter
quarter
1st half
Three quarters
Year
Excluding finance companies
1st
2nd
3rd
4th
quarter
quarter
quarter
quarter
Year
1,722
2,150
2,017
e/2,309
1,999
2,a2
1,716
2,503
e/8,198
8,630
e/725
e/600
2
739
623
582
639
858
61|6
932
593 '
1,006
8
465
597
|7 Estimated.,
£? Preliminary.
1/ Securities and Exchange Commission estimates of net proceeds.
2/ Investment Bankers Association of America estimates of principal amounts.
3/ Total new capital issues excluding offerings of sales and consumer finance
companies.
h.14
Extdbit H
Other Security Offerings 1/
(In millions of dollars)
•
Long-texm
Foreign government 2/
I960
I 1959. I 1958"
W
2 1
175
70
April
May
June
Z3U
/
72
I4O
01
60
2
196
53
•58
50
42
139
198
120
—
175
148
354
. 523
—
July
August
September
25
1
36
85
1
35.
9
5
.17
199
October
November
December
31*
2,
ill
33
30
70
58
123
74
160
11*9
181
66
547
992
. 1,67.2
.70?
Short-term
State and local government U/
January
February
March
268
IS
April
May
June
J
III
October
November
December
,T£ear
297
280
;
565
199
460
273
563
411
245
357
354
261*
246
467
399
289
423
369
IS
254
499
E/215
>/3,942
190
428
295
. 358
.
4,179
1
3,910
98
150
—
—
220
—
2,321
•, "
i
533
—
16U
1
Year
1,163
251
199
182
150
150
i.
January
February
March
Federal arericy 3/*"
1956
1959
479
475
511
359
500
409
371
2Q0
lli 4
509
486
075
20?
209
161
329
727
365
665
437
206
33d
' 733
471
208
1,54
114
137
6,047
3,090
5
:«
296
.241
282
177.
4,817
fi/ P r e l l e l n » i y . 2/ Data p r e e a s t i * I n t h l e e x h i b i t d i f f e r f r o * t h a w I n E x h i b i t f. t n t t o t r e f u i y l l n R l a t u m , a n w e l l aa new
w p . l t a l l e s u e e , w e I n c l u d e d . . L e i y - t e m s e c u r i t i e s a r e d e f i n e d am t h o s e
I n n o r e t h a n one y e a r .
2/ I n c l u d e s s e c u r i t i e s o f f - i r e d I n t h e U n i t e d S t a t e * Igr f o r e i g n g o v e r e e e n t e a n d t h e i r e u b d l v t e l o n s e n d by
International o r g a n l w t l o n a * Seureei
S e e u r l t l e e a n d Zxuhr.age Commlail-ir..
3 / l i e u e s n o t g u a r a n t e e d t y t h e H» 5 , QoVermer.!-. S o u r e a i
l e n u - t e r o * S e e u r l t l e e a n d teohosgt Corail m e l o n ;
ehort-tena, federal Reeerre.
v
\
. ( £ / P r i n c i p a l l y t a x a n d bond a n t i c i p a t i o n n a t o i , trorrairts o r o e r t l t t o a t e s a n d P u b l i c H o u s i n g A u t h o r i t y
I n aowo t n a t a n e e e PHA M t e e I n a l t i d i d may h a v e a e o e e r h a t l o n g e r t e n s t h i n one y o x f . S o u r c e 1 Pond B u y e r .
-12-
Exhibit I
Large Long-term Public Security Issues for New Capital
(Other than U. S. Treasury) 1/
Proceeds of Large Issues Offered
(In millions of dollars)
Month
Corporate
i960 - January
February
March
April
May
June
July
August
September
October
November
December
1961 - January
279
262
381*
309
139
442
303
581
266
566
1*65
26o
147
State and
local government
100
320
191
71
28
30
388
283
225
370
23k
561
191
298
367
46
186
222
391
1
Other 2/
75
25
77
150
99
Large Individual Issues Offered February 1 through 2k
Issuer
type y
Coupon
Amount
rate or Offering
(millions Maturity
net inter- yield
of
est cost
dollars)
Ratine
CORPORATE
Deb.
15.0
Consolidated Natural Gas Gb
Com. stk.
37.0
Southern Co.
Deb.
20.0
Chesapeake & Potomac Tel.
Puget Sound Pwr. & Lt. Co. 1st mtg. bds. 15.0
Deb.
150.0
General Motors Accept.Corp.
1986
1998
1991
1983
4-3/8
4-3/8
A*—5/8
4-5/8
4.33 •
Aaa
4.30
4.65
4.67
Aaa
A
STATE AND LOCAL GOVERNMENT
State of Connecticut
Houston Ind. Sch. Dist.,
Texas
Milwaukee Co., Wise.
Kentucky Turnpike Auth.
Term
Serial
Chicago - O'Hare Int'l
Airport
State of North Carolina
State of Texas
G.O.
29.0
1964-80
2.83
1.90-3.10
G.O.
Rev.-Ut.
ik.o
10.3
1963-89
1962-81
3.30
2.87
1.70-4.00
1.50-3.15
Rev.-Rent.
Rev.-Rent.
21.2
17.8
2000
1965-81
4,ou
4.80
3.50-4.60
Rev.-Ut.
G.O.
G.O.
25.0
10.0
12.5
1999
1962-80
1966-96/75
It. 66
2.86
3.26
4.50
1.^0-3.00
2.10-3.40
A
Aaa
—
Aaa
Aa
1-2
-13-
Large Individual Issues Offered February 1 through 2i| (Cont'd)
Type 3/
Amount
Coupon
(millions
rate or Offering
Maturity
of
net inter- yield
dollars)
est cost
Rating
STATE AND LOCAL GOVERNMENT
(Cont'd)
St. Louis, Missouri
Baltimore, Maryland
Dallas, Texas
G.O.
G.O.
Rev„-Ut„
G.O.
OTHER
1/
15.8
32.6
9.8
9.2
1961-81
1962-93
1961-81
1962-81
2.9k
3.12
2.97
3.03
1.50-3.10 Aa
1.50-U.20 ' Aa
1.30-3.20 Aa
1.50-I.00 A
Includes corporate and other security offerings of $15 million and over; State
and local government security offerings of $10 million and .over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues and non-guaranteed issues by Federal agencies.
3/ In the case of State and local government securities, G.O. denotes general
obligations; Rev.-Ut., revenue obligations secured only by income from public
utilities; Rev.-Q.Ut., revenue bonds secured only by revenue from quasiutilities ; Rev.-S.T., revenue bonds secured by revenue from specific taxes
only; Rev,-Rent., revenue bonds secured solely by lease payments.
-ll*-
Exhibit J
Forthcoming Large Long-term Public Security Offerings for New Capital
(other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
Date of
computation
.1560 - Jan. 29
Feb. 29
• Mar. 31
Apr. 29
May 31
June 30
July 29
. Aug. 31
Sept. 30
Oct. 31
Nov. 30
Dec. 30
1961 - Jan. 31
During month following
date shown
State and
Corporate
Other 2 /
local govt.
207
301
299
202
483
237
596
216
576
1*1*0
260
91
no
210 .
255
#9
21,3
277
180
275
283
212
2$8
21*2
hl2
181
15
35
30
30.
77 '
50
—
Subsequent to
date shown
State and
Corporate
Other 2 /
local govt.
372
372
3Wi
357
553
155
1,006 '
731 •
836
585
335
1,036
1,01*6
310
385
280
258
502
380
32 1*
283
3#
391
560
#2
360
bs
35
60
30
'
127
50
—
Forthcoming Large Offerings, as of February 2l*
I
Amount
L
.
(millions h P P ™ " ; ! 3 1 6 d a t e
of dollars)! o f °"ering
CORPORATE
American Machine & Foundry Co.
Southwestern Public Service Co.
American Telephone 6 Telegraph Co.
Commerce Oil Refining Corp.
Realty Collateral Coip.
Conv. deb.
1st rntg. bris.
Com. stk.
Deb., bds. & com.
Coll. tr. notes
ko.s
15.0
e/975.0
16.0
•20.0
i-iar. 16
(rights expire)
liar. 23
Apr. lit
I rights expire)
Indefinite
Indefinite
STATE AND LOCAL GOVERNMENT
Alabama Education Auth.
Prince Georges Co., Md.
Shelby Co., Tenn.
New York State Power Auth.
Chicago, Illinois
Commonwealth of Puerto Rico
Denver, Colorado
State of New Jersey
St. Paul, Minnesota
Duval Co., Fla.
Wash. Sanitation Dist., Md.
-"-Pennsylvania Gen. State Auth.
Commonwealth of Kentucky
Digitized Orleans
for FRASER
Parish School Dist., La.
Rev.-Q.Ut.
G.O.
G.O.
Rev.. -Ut.
Rev.-Ut.
G.O.
G.O.
G.O.
G.O.
G.O.
G.O.
Rev.-Rent.
G.O.
G.O.
30.0
11.1*
11.0
100.0
30.0
1*0.0
15.0
20.9
10.6
15.0
10.0
25.0
100.0
10.0
Feb. 28
Feb. 28
Feb. 28
Feb. 28
Lar. 1
Mar. 7
Mar. 7
Mar. 7
Mar. 8
Mar. 11*
Mar. 11*
Mar. 11*
Mar.
Indefinite
J-2
-15-
Forthcoming Large Offerings, as of February 2k (Cont'd)
Issuer
Type
Amount
Approximate date
(millions
of offering
of dollars)
STATE AND LOCAL GOVERNMENT (Cont'd)
Dade County, Florida
New York State Housing Fin. Agency
G.O. Rev.
2*6.0
100.0
Indefinite
Indefinite
OTHER
None
*—Included in table for first time.
e/ Estimated.
1/ Includes corporate and other issues of $l£ million and over; State and local
government issues of $10 million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues and non-guaranteed issues by Federal agencies.
Note. —Deletions for reasons other than sale of issue: None.
Exhibit K
•16-
Yields on New and Outstanding
Electric Power Bonds, Rated Aa arid A 1/
Date
1952-1959 - High
Low
1959 - Oct.
Nov.
Dec.
I960 - Jan.
Feb.
Mar.
Apr.
May
July 8
13
Sept. 15
23
,28
Oct. 5
21
Nov. h
16
17
18
Dec. 7 .
1961 - Jan. 12
18
25
Feb.
16
16
Aa-rated offering yields A-rated offering yields
Amount above
Amount above
Actual
Actual
seasoned yields
seasoned yields
(per cent)
(per cent)
(basis points)
(basis Doints)
5.30 (12/8/59) 87
2,93 (3/31/5W -8
5.132/
*5.08
*5.30
36
it2
63
5.09
it.82
• k.91
-»-it. 88
it.83
it5
25
37
32
26
II
•
27
17
2k
22
L78
U. 85
33
ho
5.oo
hS
11
7
it. 60
1.55
k.hh
5.65 (9/18/59) 123
3.00 (3/17/51) -15
5.33
13
S.hSn/
*5.301/
51
28
L97
5. lit
5.15
*1.95
it.93
it.88
it. 80
9
35
29
11
11
8
2it
I1.88
5.05
h3
It.60
it. 65
h.hl
-5
13
-2
-2
JL
*—Single observation, not an average.
1/ Covers only 30-year first mortgage bonds,- as reported in Moody's Bond Survey.
Except where indicated, the actual yield figure and the amount above seasoned
yields are averages of offerings during the indicated period and of the differences between these new offering yields and yields on seasoned issues of similar
quality for the same day. Average maturity for the seasoned issues varies from
26 to 28 years.
2/ Provides for a 5-year period during which issue may not be called for refunding
at a lower coupon rate, honthly averages so marked include one or more issues
with such a provision. Other issues have no such provision.
Exhibit L
-17-
Sources and Uses of Funds ByLife Insurance Companies
Uses of funds 1/
BusiState and
ness
local govt Mortgages
secursecurities
ities 2/
ities
(In millions of dollars,
Other
1,294
1,363
1,327
1,332
7,028
7,182
6,81*8
6,444
42A33
44,612
46,977
48,896
2,377
2,691
3,177
3,622
35,271
37,092
39,299
41,798
13,206
14,640
15,998
17,625
101,309
107,580
113,626
119,717
Changes:
1959 - Jan.
Feb.
Mar.
Apr.
MayJune
July
Aug,
Sept,
Oct.
Nov,
Dec.
-81
-57
-Ik
-24
10
3
-15
19
-31
22
33
99
303
-71
-185
22
-16
11
13
95
-185
-22
-131
-168
188
223
251
242
193
242
214
75
95
208
207
227
53
30
66
49
79
23
94
30
15
8
16
23
119
139
136
116
135
157
214
174
211
251
240
315
-17
174
108
80
97
60
208
101
95
92
134
226
565
438
362
485
498
496
728
494
200
559
499
722
i960 — Jan,
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
-91
-53
-30
39
-12
33
12
k
-51
90
-35.
99
.163
-36
-167
-85
-62
-102
73
-I4O
-6
-62
23
-103
20
25
35
21
26
13
104
43
82
33
26
17
274
196
21*2
225
203
192
63
226
179
214
208
277
82
207
115
95
128
211
206
175
122
11
102
173
576
464
299
429
514
469
628
576
366
597
522
651
Cash
Value of assets at
end of period:
1957 - Dec.
1958 - Dec.
1959 - Dec.
i960 - Dec.
U. S.
Govt.
128
125
104
134
231
125
167
168
4o .
311
198
188
Total
sources
or uses
1961 - Jan.
Feb.
Mar.
1/
Uses of funds represent net changes in assets and therefore reflect net, rather
than gross, uses.
2/ Includes securities of domestic corporations only.
Source. —Institute of Life Insurance.
Exhibit M
-18-
Sources and Uses of Funds bySavings and Loan Associations
Value of assets
at end of period
1957 - Dec.
1958 - Dec.
1959 - Dec.r/
i960 - Dec.
Changes:
r/1959 - Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec,
2 / 1 9 6 0 - Jan.
Feb.
Mar.
/-Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Cash
Uses of funds 1 /
Sources of funds
Net
U. S.
Total
change BorrowGovt.
sources
Mort- Other
Other
ing y
gages^/ assets
savings
ities
capital
(In millions of dollars)
2,146
2,585
2,183
2,647
3,173
3,819
h,hn
4,560
40,049
45,627
53,194
60,042
2,770
3,108
3,676
4,152
48,138
55,139
63,530
71,401
41,912
47,976
54,583
62,116
1,379
1,444
2,387
2,159
4,847
5,719
6,560
7,126
283
96
75
105
21
-3
108
23
-7
10
-28
-25
414
430
596
710
757
,884
803
740
679
626
460
468
-41
83
99
151
185
-36
-113
14
64
86
141
-65
359
582
769
786
990
1,083
367
735
684
653
634
749
446
405
527
414
599
1,089
201
394
447
3#
484
1,205
-180
-54
-8
97
62
314
31
119
148
136
56
222
93
231
250
275
329
-320
- 135
222
89
121
94
-678
316
#8
547
565
635
780
615
713
643
605
501
530
-119
65
93
106
203
-58
-127
2
63
85
153
10
92
494
667
642
939
908
219
718
731
814
776
871
468
409
623
372
630
1,216
149
489
602
667
558
1,350
-462
-114
-126
37
5
211
-127
22
49
-14
51
240
86
199
170
233
304
-519
197
207
80
161
167
-719
-297 ^
-27
-1
-180
27
238
-431
-42
-52
-69
61
371
-301
-34
49
-27
80
329
-236
30
24
10b
86
360
196
65
-22
-2
21
-143
-33
-27
1
20
36
-29
2 / 1 9 6 1 - Jan.
Feb.
Mar.
1/
Uses of funds represent net changes in assets and therefore reflect net, rather
than gross, uses. Savings and loan associations do not hold business securities
and data on holdings of State and local government bonds, presumed to be small,
are not available.
2j Data for 1957 adjusted to include mortgage pledged shares as currently reported,
3/ Advances from Home Loan Banks and other borrowing.
Source. —Federal Savings and Loan Insurance Corporation,
Exhibit N
-19-
Sources and Uses of Funds
by Mutual Savings Banks
Cash
U. S.
Govt.
ities
Value of assets
at end of period
1957 - Dec.
1958 - Dec.
1959 - Dec.
I960 - Dec.
Changes:
1959 - Jan. y
Feb.
Mar.
Apr.
May
July
Aug.
Sept.
Oct.
Nov.
Dec.
i960 - Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Uses of funds 1/
Dual- State &
local
Mortgovt.
gages
ities
Sources of funcs
Other
Total
sources
or uses
ities
2/
Net
change in
deposits
Other
(In millions of dollars)
890 7,552
921 7,266'
829 6,86k
872 6,230
It,331
it,973
li,8l49
5,071
682
725
722
676
-16
6
-31
58
-20
208
125
175
155
161
U*5
179
156
160
137
12k
132
159
116
150
129
161
169
159
206
196
168
171
161
-96
18
1*5
-ill*
8
1*3
-79
3
-2
-27
20
111
119
39
62
-1*1$
13
-85
-13
-12
-32
-281
-85
-12
-hi
13
-2
-55
-28
23
17
-1*
1*1
-33
10
19
1*
-1
8
-20
-8
-2l*
-131
37
a
-86
1*2
108
-69
-6
22
-8
9
81*
-9
-11
32
-11*8
-80
-93
-1*8
30
-32
-156
-68
-51
-12
-9
52
-19
13
57
38
-8
32
-1*
31*
51
-6
-9
3
13
-23
-k
-1*
-5
l
-6
-5
-1
20,951
761
23,039
855
2k,768
910
26,713 1,001
35,168
37,779
38,91*2
1*0,566
31,695
31*,01*1
31*, 983
36,31*5
-58
32
38
-32
1*5
39
-12
33
31
-37
1*2
-12
175
216
330
-10
217
161
32
192
163
-283
65
. 218
122
113
313
6
120
202
-51*
80
197
-187
-27
31*0
53
103
17
-16
97
-1*1
86
112
-31*
-96
92
-122
-12
1*3
a
-21
63
-59
1*2
6
11*
-25
13
-11*
-11
167
319
-132
176
178
118
223
233
-31
151*
230
-68
50
320
-95
58
221
21
105
278
56
39
377
57
117
-1
-37
118
-1*3
97
118
-1*5
-87
115
-11*7
3,1*73
3,738
3,959
It, 221
1961 - Jan.
Feb.
Mar.
17
Uses of funds represent net changes in assets and therefore reflect net, rather
than gross, uses.
2/ Includes Canadian government and political subdivisions, International Bank for
Reconstruction and Development, nonguaranteed Federal agency and other bonds as
well as corporate bonds and stocks.
2/ Adjusted to eliminate the effect of a consolidation of a large savings bank with
a commercial bank.
Source.—National Association of Mutual Savings Banks and Federal Deposit Insurance Corp.
February 27, 1961
Part II - Canada
Bill rates rose sharply and bond yields eased in Canadian financial
markets last week. These movements paralleled developments in United States
markets. The spread between Canadian and United States security yields
widened slightly during the week. The net incentive to hold the Canadian
bill (with exchange risk covered) showed little change.
Industrial stock prices continued to rise in Canada. The Canadian
dollar strengthened during the week and closed at about 101.5 U.S. cents
last Thursday or about one-half cent over its level a week earlier.
Money market. There was a sharp rise in the average yield on
Canadian Treasury bills at last Thursday's auction. The 3-month bill rose
25 basis points from 2.86 per cent on February 16 to 3.11 per cent on
February 23. The 6-month bill yield rose 22 basis points from 3.37 per
cent on February 16, to 3=37 per cent on February 23° The chartered banks
purchased $18 million of bills during the week while the Bank of Canada sold
$U million, Government Accounts sold $5 million, and the general public
reduced its holdings by $7 million (see Table).
The spread favoring the Canadian over the U.S. Treasury bill
widened slightly as yields in both countries rose sharply. The discount
on the 3-month forward dollar widened slightly and the net incentive to
hold the Canadian bill on a covered basis showed littld change at 0.U5 per
cent per annum (see Table).
Bond market. Bond yields eased slightly last week for all
maturities and the spread favoring Canadian yields widened slightly. The
Canadian press reported that the bond purchases by the Federal Reserve in the
New York market last week
gave strength to the Canadian market and had the
immediate resuj-i. ox adding from one-half to one full point to bids on
several long-term issues. The spread between selected comparable Canadian
and United States securities (Thursday yields for bills and Wednesday yields
for bonds) were as follows (figures in parentheses refer to the previous
week):
0.57
0.65
0.95
1«30
1.50
per
per
per
per
per
cent
cgnt
cent
cent
cent
on
on
on
on
on
a 91-day bill (0.U8)
a 182-day bill (0.58)
an 8-year bond (0.8U)
a 30-year bond (1.29)
a 35-year bond (1.37)
The Bank of Canada purchased a net of $12 million of Government bonds during
the week and shifted from over-2-year maturities (-46 million) to under-2year maturities (+$l8 million). The chartered banks sold $7 million of
bonds during the week and the general public sold $19 million.
A $20 million issue by Alberta Municipal Financing Corp. was
offered at 5-1/2 per cent due April 1, 1983, priced at 98.50 to yield 5=62 per
cent. The issue was oversubscribed. Saskatchewan is issuing $10 million of
for 20-year,
FRASER5-1/2 per cent debentures.
Digitized
Foreign exchange. There was some strengthening of the Canadian
dollar last week while the discount on the 3-month forward Canadian dollar
widened slightly. The spot rate on the dollar closed at 101.L5 (U.S. cents)
last Thursday compared with 100.98 (U.S. cents) the week before. The
discount on the forward dollar rose from 0.06 per cent per annum the week
before to 0.12 per cent last week.
Stock exchanges.— Industrial stock price indices on the Canadian
exchanges through early last week showed a continuation of the rise in
prices which began about 3 months ago. Both the Toronto and the Montreal
exchanges rose over 10 per cent since the last week of November. The total
quantity of stock purchased on the Canadian exchanges during the week
ending February 17 was $9,756 million compared with $9 .1*93 million in the
previous week. The following table gives a comparison of changes in
industrial stock price indices for Toronto, Montreal, and New York "Standard
& Poor over the last few months:
I960 - High
Low
I960 - Nov. 28
Dec. 9
23
1961 — Jan. 6
27
Feb. 10
17
21
Toronto
Montreal
532.9k
172.38
U96.UU
£05.63
216.69
529.69
$39.50
5U0.15
5U6.25
5U6.88
320.0
258.5
26U.1
267.0
272.6
282.0
292.7
291.3
295.3
291UO
British Commonwealth Section
Division 'of International Finance
Board of Governors of the Federal Reserve System
New York
Standard & Poor
65.00
55.3b
59.45
60.11
60.88
61.86
6U.86
65.60
65.90
Selected Canadian Honey Market and Related Data
3-mo Treas. bills
7Z
Spread
maoa
Canada
y
U.sJy
over U.S.
High
Low
I960 - High
Low
6.16
Jan, 26
Feb, 2
9
16
23
3.0k
3.13
3.10
2.86
3 oil
1959
3.25
5.1k
1,68
kok9
2,80
U.63
2,10
2.96
0.30
Canadian dollar
Spot
3-mo. discount {-).
c/
forward premium(+)g/
105o51
102,58
1.62
-0.82
1 0 5 .2 ? .
100.33
0.87
0,82
0,7U
0.U8
0.57
101.05
100088
101,16
100.98
. 101,45
2.17
2,31
2.36
2.38 .
2.5U
Net incentive to
hold i
bl
—
100.95
100,81
101.09
100.97
101,1*2
0.99
-0.91
1.99
-0.57
-0.37
-0.2$
"0.25
-0.06
-0.12
0.50
0.57
0.U9
0.42
o.U5
a/ Average yield at weekly tender on Thursday.
%f Composite market yield for the U.S. Treasury bill on Thursday close of business,
c/ In U.S. cents,
3 / Spread between spot rate and 3-month forward Canadian dollar on Thursday
closing, expressed as per cent per annum.
e/ Spread over U.S. Treasury bill (column 3), plus 3-month forward discount or
premium (column 6).
—
Selected Government of Canada Security Yields
6-ao. Traaa..bills
spread
Canada
.1959 - High
Low
I960 - High
Low
3.36
"3.^83-43
3.15
3.37
a
. 1.37
-0.86
5.27
U-5o
5.55
U0O9
0.96
0,98
0,86
0.58
0.65
k.72
U.68
4.58
4.64
4.63
0.21
00000
Jan, 26
Feb, 2
9
16
23
6.2U
5 oil
5.33
1.99
Intermediate
bonds (8 yr.)
spread
over
Canyia
u.s.4/
Long-term bonds
120 year)
135 year)
Spread
spread
Canada
Canada
5.30
4,44
5.42
U.63
5.18
5.18
5.15
5.08
5,01
a
1.36
0.85
5.05
U.73
5.28
U.68
1.29
1.29
1.32
1^29
1.30
5.18
5.19
5.19
• 5-15
5-06
a/ Average yield at weekly tender on Thursday.
V Spread between Canadian auction rate and composite market yield of U.S.
bill on close of business Thursday.
o/ Government of Canada 2 - 3A per cent of June 1967-68•
y Spread over U.S. Government 2 - 1 / 2 per cent of 1963-68.
e/ Government of Canada 3 - l A per cent of October 1979#
y Spread over U.S. Government 3 - l A per cent of 1978-83.
d Government of Canada 3 - 3 A per cent of Septentoer 1996 -- March 1998,
n/ Spread over U.S. Government of 199$,
a
1.61
0.95
1.U8
1.50
1.55
1.37
1.50
-23Canada: Changes in Distribution of Holdings of Canadian
Government Direct and Guaranteed Securities
(millions of Canadian dollars, par value)
Bank of Canada
TTMS#
bills
Bonds
Dec. 22
29
Jan. 5
12
19
26
Feb. 2
9
16
23
Sources
+
+
+
-
5
3
2
9
Hi
20
18
5
10
u
+
Government
Total
9
0
2
12
25
1
46
4
30
12
Chartered banks
Treas.
bills
Bonds
+
+
+
+
+
+
+
+
+
-103
+ 2
- 11
+ 16
+ 25
- 15
- 61
- 6
- 9
- 6
18
6
18
39
10
Ui
24
33
8
18
+
+
+
+
+
General public
Savings Ttbslb *
bonds
bills
Bonds
23
lit
12
2
17
6
51
8
22
7
+
+
-
11
- 11
8
-'15
4
16
- 24
+ 3
7
- 10
7
- 8
3
3 . - 31
+ 6
7
7
- 9
- 62
- 24
+ 10
- 11
+ 17
+ 7
+ 56
- 6
+ 8
- 19
Bank of Canada, Weekly Financial Statistics.
Selected Canadian Financial Statistics
(in millions of Canadian dollars or per cent)
Monthly
L . Money supply:
Currency and deposits
Less: Govt, deposits
Equals: privately held
Change in period
!. General bank loans
Change in period
!. Total Govt, securities:
Of which: Treas. bills
Bonds
Savings txyids
. New security issuesi/
Of which sold in U.S.
13,768
628
13,140
- 2U1
13,811
548
13^53
+ 123
Jan.
13,763
35U
13,409
+ 2U3
-4,027 -4,117 -4,076
+
56
17,99k
1,982
12,377
3,632
1,014
0
+
91
17,760
1,985
12,179
3,596
1,311
1U
-
.41
17,239
1,985
12,161
3,193
788
1
Feb. 2
Weekly
Feb. 9
Feb^l6
13,720
13-M
-
208
5,016
+
24
17,736
1,985
17,7U2
1,985
3,590
159
0
3,597
12,161
12,160
. Chartered bank liquidity:
Cash reserve
1,017
1,027
1,027
1,015
1,018
Cash ratio
8.1
8.2
8.2
8.2
8.1
8.1
Liquid assets
2,125
2,189
2,093
2,309
2,287
2,28U
Liquid asset ratio
16.8
17.3
17. 4
18.U
18.2
18.2
1/ Seasonally adjusted
2f Source: A. E. Ames & Co., Ltd. (includes public and private securities.)
INTEREST
ARBITRAGE,
NEW
YORK
/
LONDON
Friday figures
3-MONTH
RATE
RATE
Per cent per annum
TREASURY
DIFFERENTIAL
DIFFERENTIAL
BILL R A T E S
AND
3-MONTH
WITH
FORWARD
1959
FORWARD
EXCHANGE
STERLING
COVER
11*0
@FedFRASER